Quickflix founder Stephen Langsford has stepped up his attack on rival streaming service Stan, accusing co-owner Nine Entertainment of trying to drive his company out of business.
Quickflix entered voluntary administration this week, blaming Stan for blocking the investment it needs to pay for new content and marketing by refusing to restructure its holding in its rival.
Mr Langsford said on Thursday that Nine Entertainment, which acquired the redeemable preference shares from HBO in 2014 and passed them to its joint venture with Fairfax, was deliberately trying to stifle his business.
“Whilst Nine indicated that they were treating the acquisition as a financial investment, their actions and inaction since the acquisition tend to indicate otherwise,” Mr Langsford said in a statement.
“We had discussions regarding restructuring the RPS in a way that would allow us to raise new capital and grow the business, but it became clear that Stan had a different agenda, and was primarily driven by the goal of gaining our member base and removing us as a competitor.”
Quickflix has said it can’t afford the price set by Stan to restructure the $11.7 million worth of redeemable preference shares – a prerequisite for interested investors.
Stan wants either $4 million in cash or $1.25 million plus all of Quickflix’s streaming customers.
Mr Langsford said Quickflix management will now submit a plan to administrator Ferrier Hodgson that will “reposition the company as a broader based digital consumer, e-commerce and entertainment player” and allow new capital to be raised.
Perth-based Quickflix, which was founded in 2003 and still operates a DVD rental service, has been hit by the emergence of competitors including US giant Netflix.
Quickflix this month announced plans to save more than $1 million a year by cutting staff, closing offices and reducing directors’ pay, while Mr Langsford said the company has been negotiating cuts in licensing fees with content providers.
“The result was that for the first time, Quickflix was cashflow positive in the March quarter,” Mr Langsford said.
Mr Langsford said the administrators are focused on maintaining the existing business, with new content and marketing plans being developed with existing staff.
More than 2,200 new subscribers had been added in the past week, he noted.
Ferrier Hodgson has agreed to honour all valid Quickflix gift cards.
Quickflix’s first creditors meeting will be held on May 6 in Perth.